From “The Speed of Trust: The One Thing That Changes Everything” by Stephen M. R. Covey
According to a study by Warwick Business School in the UK, outsourcing contracts that are managed based on trust rather than on stringent agreements and penalties are more likely to lead to trust dividends for both parties – as much as 40 percent of the total value of a contract. A 2002 study by Watson Wyatt shows that total return to shareholders in high-trust organizations is almost three times higher than the return in low-trust organizations. That’s a difference of nearly 300 percent! An education study by Stanford professor Tony Bryk shows that schools with high trust had more than a three times higher chance of improving test scores than schools with low trust. On a personal level , high-trust individuals are more likely to be promoted, make more money, receive the best opportunities, and have more fulfilling and joyful relationships.
One of the reasons why the hidden variable of trust is so significant and compelling in today’s world is that we have entered into a global, knowledge worker economy. As New York Times columnist Thomas Friedman observes in The World Is Flat, this new “flat” economy revolves around partnering and relationships. And partnering and relationships thrive or die based on trust. As Friedman says:
Without trust, there is no open society, because there are not enough police to patrol every opening in an open society. Without trust, there can also be no flat world, because it is trust that allows us to take down walls, remove barriers, and eliminate friction at borders. Trust is essential for a flat world…..
This is why I again affirm: The ability to establish, grow, extend, and restore trust with all stakeholders – customers, business partners, investors, and coworkers – is the key leadership competency of the new global economy.